The government also increased the power of the FIPB.
Reserve Bank Governor Raghuram Rajan on Monday warned against compromising India's interest for the sake of attracting foreign investment and said the priority should be framing transparent policies as well as resolving contractual tax disputes quickly.
Deadlock over the government's decision to allow FDI in retail paralysed Parliament for the fourth day on Wednesday, with a united opposition joined by United Progressive Alliance partners Trinamool Congress and Dravida Munnettra Kazhagam disrupting proceedings, demanding a rollback of the controversial decision. With formal and back-channel talks between government leaders and their opposition counterparts failing to make any breakthrough, both Houses were adjourned.
In a major relaxation of foreign investment rules in the pharma sector, a special group set up under the finance ministry has suggested it could consider permitting up to 49 per cent FDI (foreign direct investment) in the automatic route for brownfield investments in case the company's control remained in Indian hands.
Propelled by strong growth in the pharmaceutical sector, India's foreign direct investment jumped over 133 per cent to $814 million during April-June 2004 as compared to $349 million reported in the corresponding quarter last year.
The Confederation of All India Traders, the apex body of trade federations and small-scale sector players in the country, upped their campaign on Saturday against the United Progressive Alliance government's proposal to bring in foreign direct investment in multi-brand retail by another notch. The CAIT announced a nationwide campaign, 'Retail FDI bhagao, apne vatan ko bachao' (Chase out FDI in retail, save our nation) in the national capital on Saturday.
The Government on Thursday said foreign direct investment will not be allowed in housing projects for urban poor.
Additional investment of $190 billion has to be made in the next eight years.
"AAP has done a fabulous job highlighting corruption and governance issues and have a good platform for that, but their economic platform is very scary," Venktesh Shukla, president, The Indus Entrepreneurs Silicon Valley, the largest TiE chapter, told Rediff.com. "Valley investors are watching India minutely; the next few months are very crucial for Silicon Valley investors."
It is a myth that FDI in retail will kill at local kirana stores.
Leader of Opposition in the Rajya Sabha Arun Jaitley on Tuesday blamed Congress President Sonia Gandhi and her Congress General Secretary son Rahul for the FDI decision. Jaitley said that the decision on FDI was taken without bothering that it will hurt the interests of farmers, small traders as well as consumers, and would in no way help the economy.
Before concluding that the current level of FDI flows is a reflection of India coming into its own with regard to manufacturing, it is important to carefully study the numbers and to understand the story that they tell.
Gujarat riots, terror attack in the United States and SARS outbreak in South East Asia led to a massive fall in foreign direct investment in India during 2001-02 to 2003-04, according to an Assocham report.
The government has cleared 12 foreign direct investment (FDI) proposals that will bring in Rs 212 crore (Rs 2.12 billion), of which the largest chunk will be by US-based Millennium India Acquisition Company. Meanwhile, 13 proposals, including two from B A G Films, were deferred by the government, according to an official statement. The US-based company will bring in Rs 159.92 crore (Rs 1.59 billion) of FDI to acquire stakes in two non-banking finance companies.
Industry body CII has asked the governments of Delhi and Rajasthan to reconsider their decisions to scrap the FDI policy for multi-brand retail as such investments would help create millions of jobs and benefit consumers.
The stipulation that new front-end stores will have to be set up will impact M&A in the sector.
While Federation of Indian Chambers of Commerce and Industry extended an all-out support to the government, Confederation of Indian Industry recommended 'a calibrated approach for introducing FDI in the retail sector in terms of the percentage and minimum capitalisation requirements'.
Opposition members created an uproar in both Houses of Parliament on Monday over issues like allowing 51 per cent Foreign Direct Investment in multi-brand retail, demand for Telangana state and threat to people of Kerala due to Mullaperiyar dam.
The finance ministry on Wednesday ruled out more than 26 per cent foreign direct investment in pension sector and said fund managers would be selected through a competitive bidding process.
On the retail FDI issue, a possibility being talked about in the corridors of power is the Congress might withdraw its support to AAP in Delhi.
Remaining firm in her party's opposition to the United Progressive Alliance government's decision on FDI in retail, Trinamool Congress chief Mamata Banerjee has told Prime Minister Manmohan Singh that her party is not in favour of the government being toppled.
The foreign direct investment in the country declined by 25 per cent to $2.04 billion in January compared to the same month last year, snapping a trend of positive growth in the previous three consecutive months.
The FIPB, headed by Finance Secretary Arvind Mayaram, at its meeting on Tuesday considered 35 proposals.
India was fourth in 2008, in terms of FDI inflows, among developing countries, he said referring to UNCTAD World Investment Report (WIR) 2009.
Retail sector seeks industry status, which can reduce the cost of capital and to allow FDI in retail that can increase investments and global competitiveness.
Sharma proposes to pass on the 'handover note' to his successor, which as per the poll projections is likely to be from Bharatiya Janata Party-led National Democratic Alliance.
Buoyed by favourable policies, India has emerged as the fourth largest destination in Asia for foreign direct investment, attracting over Rs 20,000 crore (Rs 200 billion) within the first six months of the current fiscal year.
Finance Minister Pranab Mukherjee may be right in pushing for FDI in retail because reports have been pouring in, indicating that the economic downturn in India and abroad will worsen in coming weeks. Sheela Bhatt examines the politics behind the government's decision.
Bharatiya Janata Party-led National Democratic Alliance on Monday accused the government of allowing foreign direct investment in retail with an aim of distracting and disrupting Parliament that was set to discuss crucial issues of price rise and black money.
The Union Cabinet on Thursday is believed to have deferred a proposal for hiking foreign investment cap in telecom sector to 74 per cent from the existing 49 per cent.
Foreign direct investment into India is expected to touch $15 billion by the end of the present fiscal, with more overseas firms eyeing good returns from the sub-continent.
SSTL is the second operator after Vodafone that has approached FIPB for raising FDI limit.
Internet shutdowns by law enforcement agencies like the one in Manipur and Punjab cost $1.9 billion to the Indian economy in the first half of 2023, a report said on Thursday. The shutdowns also led to a loss of nearly $118 million in foreign investment and triggered over 21,000 job losses, the global non-profit Internet Society said in its report 'Netloss'. The non-profit arrived at the financial impact of the shutdown going beyond the loss of output and included factors like change in the unemployment rate, Foreign Direct Investment (FDI) lost, risks of future shutdowns, population in the working age etc.
The officials say no "concrete move" has yet been taken to take the matter to the Union cabinet for approval after the recommendation of the Committee of Secretaries (CoS) on July 22 to allow 51 per cent FDI.
Gujarat Chief Minister Narendra Modi on Friday accused Prime Minister Manmohan Singh of "acting" in the interest of United States first in getting the nuclear deal through and then allowing FDI in multi-brand retail and questioned why he did not "turn active in India's interest".
The government on Friday cleared 24 FDI proposals valued at Rs 158.82 crore (Rs 1.58 billion), including ICICI Bank's Rs 44.45 crore (Rs 444.5 million) American Depository Shares offering and proposals of Colgate Palmolive and Bausch & Lomb.
Government is planning to allow foreign direct investment in the construction sector, Commerce and Industry Minister Kamal Nath said on Tuesday.
The note recommends allowing FDI in domestic firms through the issue of partly-paid up shares and convertible warrants, but with certain riders.
